LONDON, Sept 8 (Reuters) - Sterling rose more than 1.0 percent against the dollar to its highest in two weeks on Tuesday, spurred by the dollar's broad fall and helped by a higher-than-expected increase in UK industrial production.
UK manufacturing output rose 0.9 percent in July, its fastest rate in 1-1/2 years, on a sharp pick-up in car production. [ID:nONS004469]
The gain was much higher than forecasts for a 0.3 percent increase. The wider measure of industrial output, which includes energy production, rose by 0.5 percent on the month.
Analysts said the figures suggested Britain's economy may be on track to emerge from recession.
"Today's data reinforce our view that the UK economy is on course for positive growth in Q3," said Colin Ellis, economist at Daiwa Securities, noting even if production is unchanged in August and September, manufacturing output would be on course to grow some 1.0 percent in the third quarter.
The data bolstered the pound, which was already rising on a sharp drop in the dollar against a number of currencies.
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